Why iPods Sell for $250, No Matter What

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Even while everything else falls in price — TVs, DVD players, etc — why is it that a few specific items always stay hover around one price point? Slate disects the concept of Minimum Advertised Price (MAP) which is what companies like Apple use to prevent stores from undercutting each other — and their own retail stores.

Use of MAP in some form is fairly common in the gadget world, though few companies seem to pursue it with the rigor of Apple or Sony (both of whom operate retail stores). Shawn DuBravac of the Consumer Electronics Association believes most gadget manufacturers prefer to let the market determine price, and the dispersion described by Varian and Baye suggests he’s probably right. (None of the companies I contacted for this story would discuss their pricing strategies with me.) That means good deals for shoppers willing to search them out.

What does this mean for you? It means that no matter where you go, you’ll never get a deal on an iPod and it also explains why stores like Costco offer iPods at essentially the same price as Amazon et al. You learn something new every day, don’t you?